European stocks fell on Friday as a sharp sell-off in US technology and semiconductor shares spread across global markets, raising concerns about the future of artificial intelligence investment and the financial risks surrounding the rapid expansion of data centres.
The Stoxx Europe 600 opened 1.2% lower, while Germany’s DAX dropped 1.6%. France’s CAC 40 and the UK’s FTSE 100 both declined by 1.4% in early trading. The losses followed one of the worst sessions for US technology stocks in recent years, with investors reassessing the outlook for the artificial intelligence industry and the companies supplying the technology behind it.
Asian markets also came under pressure. The MSCI AC Asia Index fell more than 4% as concerns over AI-related investments spread beyond Wall Street. However, US stock futures suggested that the selling pressure could ease, with Nasdaq-100 futures rising around 1% at approximately 10:00 CET.
One of the main concerns facing investors is whether the recent US midterm election results could lead to tighter restrictions on the construction of new data centres. Democrats recorded significant victories in several contests, and some successful candidates have promised to slow or stop new data centre developments in their areas.
Opposition to these projects has grown across political lines, with communities raising concerns about their impact on electricity supplies, infrastructure and local resources. According to market intelligence company Cleanview, approximately 40% of planned data centre capacity in the United States is located in states where governors or governors-elect have pledged or already introduced pauses on new projects.
The issue has also attracted attention at the federal level. US Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez proposed a nationwide moratorium on new data centre construction earlier this year.
The political developments have added to wider investor concerns about the amount of money technology companies are spending on artificial intelligence. Major firms have committed hundreds of billions of dollars to developing AI infrastructure, including data centres, advanced computer chips and the electricity systems needed to operate them. Investors are increasingly questioning how quickly these investments will generate sufficient returns.
Higher borrowing costs have added another challenge, making it more expensive for companies to finance large infrastructure projects. If construction slows or planned investments are delayed, demand for semiconductors and electricity could weaken, with possible consequences for technology companies and wider US economic growth.
The pressure on technology shares was particularly severe on Thursday, when the Philadelphia Semiconductor Index fell 12.2%, marking its largest single-day decline since 2020. The index had lost approximately 16% of its value over the week by Thursday’s close.
The wider US stock market also suffered substantial losses. The Nasdaq Composite dropped 5.5%, the S&P 500 declined 4.4%, and the Dow Jones Industrial Average fell 3.4%. All three recorded their steepest daily percentage declines since US President Donald Trump announced sweeping tariffs in April 2025. Companies listed on the S&P 500 collectively lost a record $2.9 trillion (€2.6 trillion) in market value during Thursday’s session.
The scale of the losses highlighted the influence of a relatively small group of major technology and semiconductor companies on the wider US stock market. Stuart Clark, a portfolio manager at Quilter, said the declines demonstrated how heavily the Nasdaq and S&P 500 depend on a handful of large technology and chip stocks. When those companies come under pressure, their size and influence can quickly pull the broader indices lower.
The market decline also affected the wealth of some of the world’s richest technology executives. According to the Bloomberg Billionaires Index, Nvidia chief executive Jensen Huang lost $15.1 billion (€13.5 billion) in net worth, while Elon Musk’s fortune fell by $79.7 billion (€71 billion).
Trump blamed Democrats for the market losses in a post on his Truth Social platform. He linked the decline to their election victories, writing: “The Stock Market crashed today because the Dumocrats had a big Tuesday – So sad to see, you only have yourselves to blame!”
The sell-off was equally visible across Asia, where major semiconductor companies recorded significant losses. Japan’s Nikkei 225 recovered some of its earlier losses but still closed 6% lower. Shares in Kioxia and SoftBank fell more than 10% during trading before ending the session down 8.7% and approximately 11%, respectively. Advantest also dropped more than 8% during the trading session.
South Korea’s Kospi closed 6% lower after falling as much as 8.8% earlier in the day. The sharp decline triggered a 20-minute trading halt. Semiconductor manufacturer SK Hynix lost 10.4%, while Samsung Electronics finished 6.4% lower.
Taiwan’s Taiex ended the session down 4.5%, having fallen more than 8% at one point. Shares in Taiwan Semiconductor Manufacturing Company (TSMC), one of the world’s most important chip manufacturers, closed 4.7% lower after dropping nearly 10% earlier in the session.
Other Asian markets also recorded losses. Hong Kong’s Hang Seng Index was down approximately 1.1% at the midday break, while mainland China’s Shanghai Composite closed 1.1% lower. Australia’s S&P/ASX 200 finished the day down 0.5%.
Despite the scale of the declines, some market analysts questioned whether the sell-off reflected the underlying outlook for the technology sector. Neil Wilson of Saxo Markets described the market reaction as potentially excessive but said investors would first want to see signs of stability before considering a recovery.
Concerns about the financial exposure to data centre development are also appearing in the banking sector. Dutch bank ING is seeking to sell a portfolio of data centre loans worth approximately $500 million (€447 million), according to a Bloomberg report citing people familiar with the matter. The decision to put the loans up for sale as a single portfolio comes as investors reassess the financial outlook for AI infrastructure.
Beyond equities, other financial markets also reflected the shift in investor sentiment. Brent crude futures traded just below $99 a barrel as traders monitored developments in discussions between the United States and Iran. Leaders from both countries had indicated earlier in the week that talks were making progress.
Government bonds gained as investors moved towards assets traditionally considered safer during periods of market uncertainty. The yield on the US 10-year Treasury fell six basis points to 4.84%. In Europe, France’s 10-year government bond yield declined two basis points to 4.77%, while Germany’s fell three basis points to 3.22%.
Currency and gold markets also moved lower in the early European session. The dollar strengthened against the Japanese yen, while the euro slipped 0.3% against the dollar to $1.1188 shortly after European markets opened. Spot gold fell 1.2% to $4,065 an ounce by 09:00 CET.
The latest market movements have placed the scale and financing of artificial intelligence investment under closer scrutiny. Technology companies are facing questions not only about the commercial returns from their AI spending but also about the regulatory and infrastructure conditions needed to sustain the expansion. For investors, the concern is increasingly whether the expected growth in AI can justify the enormous financial commitments already made.
